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Avnet Gains From Global AI Infrastructure Demand: What's Ahead?
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Key Takeaways
Avnet benefits from AI infrastructure demand spanning data centers, industrial markets and edge applications.
Avnet's fiscal 2026 IP&E sales rose to $4.6 billion from $4 billion, aided by AI infrastructure.
Avnet expects fiscal 2027 first-quarter adjusted EPS of $2.80-$2.90, with estimates revised upward.
Avnet, Inc. (AVT - Free Report) continues to benefit from strong artificial intelligence (AI) demand, which remains a key growth catalyst as data center applications expand. The company is also benefiting from rising demand for technologies that support AI infrastructure, including power management, connectivity, automation and other enabling solutions across industrial markets.
Avnet indicated that direct data-center business represents approximately 10-15% of total company sales, with a greater concentration in Asia-Pacific. At the same time, the AI ecosystem is creating indirect opportunities in industrial markets, as hyperscaler and data-center expansion drives demand for cooling, power and other infrastructure components.
The company is additionally seeing emerging demand from customers deploying AI at the edge, including applications such as robotics, drones and autonomous systems that require sensing, connectivity, embedded computing, power and thermal-management components. Avnet’s direct exposure to data-center customers remains particularly meaningful in Asia-Pacific.
The company is also benefiting from its higher-margin interconnect, passive and electromechanical (IP&E) portfolio. Fiscal 2026 IP&E sales reached approximately $4.6 billion compared with $4 billion in fiscal 2025. The IP&E benefited from AI infrastructure and industrial automation. Avnet ended fiscal 2026 on a strong note, with fourth-quarter sales reaching a record $8.3 billion, up 48% year over year and 17% sequentially
How Competitors Fare Against Avnet
Avnet operates in a competitive technology distribution market where it competes with global component distributors as well as broader IT distributors, including Arrow Electronics (ARW - Free Report) and TD SYNNEX (SNX - Free Report) . However, Avnet benefits from the niche it has created for itself, which helps to protect its margins.
Arrow Electronics competes head-to-head with Avnet in electronic component distribution, semiconductor supply, embedded computing and engineering services. Both Arrow Electronics and Avnet serve OEMs, industrial manufacturers, automotive suppliers, communications equipment vendors and data center customers.
Avnet comes into crossroads with TD SYNNEX in the broader AI infrastructure value chain. Avnet plays its role much earlier in the technology value chain by supplying electronic components directly to equipment manufacturers, making the overlap minimal with TD SYNNEX. Given these dynamics, Avnet has little to worry right now.
AVT’s Price Performance, Valuation and Estimates
Avnet shares have soared 85.9% in the year-to-date period, outperforming the Zacks Electronics - Parts Distribution industry’s 59.8% growth.
AVT YTD Performance Chart
Image Source: Zacks Investment Research
Despite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.21X, which is below the industry’s P/S multiple of 0.34X. The undervaluation is further substantiated by Zacks Value Score of A.
AVT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
For the first quarter of fiscal 2027, Avnet expects adjusted EPS to be in the range of $2.80-$2.90. The Zacks Consensus Estimate for Avnet’s upcoming quarter indicates growth of 241% year over year. Estimates have been revised upward in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Avnet Gains From Global AI Infrastructure Demand: What's Ahead?
Key Takeaways
Avnet, Inc. (AVT - Free Report) continues to benefit from strong artificial intelligence (AI) demand, which remains a key growth catalyst as data center applications expand. The company is also benefiting from rising demand for technologies that support AI infrastructure, including power management, connectivity, automation and other enabling solutions across industrial markets.
Avnet indicated that direct data-center business represents approximately 10-15% of total company sales, with a greater concentration in Asia-Pacific. At the same time, the AI ecosystem is creating indirect opportunities in industrial markets, as hyperscaler and data-center expansion drives demand for cooling, power and other infrastructure components.
The company is additionally seeing emerging demand from customers deploying AI at the edge, including applications such as robotics, drones and autonomous systems that require sensing, connectivity, embedded computing, power and thermal-management components. Avnet’s direct exposure to data-center customers remains particularly meaningful in Asia-Pacific.
The company is also benefiting from its higher-margin interconnect, passive and electromechanical (IP&E) portfolio. Fiscal 2026 IP&E sales reached approximately $4.6 billion compared with $4 billion in fiscal 2025. The IP&E benefited from AI infrastructure and industrial automation. Avnet ended fiscal 2026 on a strong note, with fourth-quarter sales reaching a record $8.3 billion, up 48% year over year and 17% sequentially
How Competitors Fare Against Avnet
Avnet operates in a competitive technology distribution market where it competes with global component distributors as well as broader IT distributors, including Arrow Electronics (ARW - Free Report) and TD SYNNEX (SNX - Free Report) . However, Avnet benefits from the niche it has created for itself, which helps to protect its margins.
Arrow Electronics competes head-to-head with Avnet in electronic component distribution, semiconductor supply, embedded computing and engineering services. Both Arrow Electronics and Avnet serve OEMs, industrial manufacturers, automotive suppliers, communications equipment vendors and data center customers.
Avnet comes into crossroads with TD SYNNEX in the broader AI infrastructure value chain. Avnet plays its role much earlier in the technology value chain by supplying electronic components directly to equipment manufacturers, making the overlap minimal with TD SYNNEX. Given these dynamics, Avnet has little to worry right now.
AVT’s Price Performance, Valuation and Estimates
Avnet shares have soared 85.9% in the year-to-date period, outperforming the Zacks Electronics - Parts Distribution industry’s 59.8% growth.
AVT YTD Performance Chart
Image Source: Zacks Investment Research
Despite this outperformance, AVT stock is trading at a price-to-sales multiple of 0.21X, which is below the industry’s P/S multiple of 0.34X. The undervaluation is further substantiated by Zacks Value Score of A.
AVT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
For the first quarter of fiscal 2027, Avnet expects adjusted EPS to be in the range of $2.80-$2.90. The Zacks Consensus Estimate for Avnet’s upcoming quarter indicates growth of 241% year over year. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
AVT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.